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Thursday, June 9, 2016

What's eating your lunch? A tale of Strategy and Culture
by Alaina Love
“No kicking, no biting, no scratching!” I admonished, as I watched six senior leaders (all men) duke it out during a three-day strategy session held in a secluded hotel conference room far from their corporate offices.

Things were getting pretty heated and the exchanges were progressively brutal during a meeting in which these top leaders were supposed to be defining the steps that their company needed to take to regain dominance in the industry.

“We can’t do what you’re suggesting,” the head of sales shouted at one of his colleagues. “Product development will never deliver on time and we will be stuck with a financial target that there is no way we can meet! They screwed us over last year and we’ve been racing to close the gap for the last 10  months. Our sales teams are spent and frustrated!”

These leaders were part of a company that had grown from a young startup, full of energy and fresh ideas, to a billion-dollar firm with thousands of employees. Today, it bears little resemblance to the firm they had all joined years before, and the leaders were experiencing the frustration of navigating a bureaucracy that they had to own a hand in creating.

As the company grew, the founding team worked hard to safeguard their turf, especially after an industry giant, known for its extensive processes and procedures, acquired the firm. While analysts heralded the acquisition as a brilliant move, and top leaders celebrated the increased value of their stock options, other insiders worried about how the acquisition would change the culture that had made the company successful.

As I watched the six leaders locking horns that day like boys in a schoolyard battle, I realized that they were in the throes of a struggle with balancing traditional and evolutionary leadership thinking, specifically the delicate balance between the power of strategy and culture to shape or thwart success.

Critical balance

The new corporate strategy these leaders were attempting to implement was to grow sales by acquiring more and more new customers, a strategy that was supposed to be supported by annual launches of innovative products that were well ahead of industry competitors.

While that seemed like a solid plan, as it turns out, the products were rarely delivered on time, and when they were released, the sales force struggled to understand their value based on customer needs. This dilemma was coupled with a culture that had been built on customer service, which was now at odds with a strategy that required sales representatives to chase down larger numbers of new prospects, fragmenting the time they had to devote to existing clients.

It should come as no surprise, then, that sales churn grew as the strategy unfolded. Formerly loyal and long-standing customers began to cancel orders because they were irritated with the shrinking level of service and handholding they were receiving, and the diminishing number of support visits from sales representatives. To add insult to injury, the company raised prices for current products in an attempt to meet revenue goals that were not being achieved through new-product adoption. The culture that had made the young startup great, one of customer service and innovation, was eating this new strategy for lunch — and the balance sheet was choking on the crumbs.

While the war to regain customers was being waged in territories across the country, things weren’t getting better at headquarters. Divisional leaders were adopting a strategy of protectionism, where butt-covering and maneuvering to be seen favorably by the CEO were crushing innovation. A culture that once welcomed out-of-the-box ideas and valued what could be learned from mistakes was now safely skating down the middle road, instead of exploring the edges of possibility.

Worse, whoever stood in good graces with the acquiring company’s leadership was the voice that got heard, and no leader was openly willing to reveal product-development issues to the CEO. Mud rolled downhill, as it is inclined to do, and landed squarely on the heads of the sales team, which was gasping to achieve targets that were virtually insurmountable.

This is a story of failure, a Shakespearean drama being played out in conference rooms across industries, maybe even in your own organization. Your company is in deep trouble when leaders at the operating level aren’t courageous enough to shine a bright light on dysfunctional practices that thwart productivity. It’s usually a sign that they care more about their own survival than the future of the business.

These leaders forget that, first and foremost, they are stewards of the business and should be champions of the ideas and people who make it run. If you allow the culture that has made your organization successful to be smothered by corporate need for control, the opportunities to innovate will diminish. And the only ones who’ll be left at the table for dessert are your competitors.

Fuente: SmartBrief

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.·. Miguel Ángel MEDINA CASABELLA, MSM, MBA, SMHS .·.
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